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Inslee protects research fund from legislative ax

Washington's Life Sciences Discovery Fund remains intact for another year. Gov. Jay Inslee on Friday vetoed a section in the Legislature's 2014-2015 supplemental operating budget that would have eliminated the fund.

Instead, $20 million will be taken out of the state's reserve funds of almost $900 million to keep the life sciences investment program running. "There are numerous ways that we benefit from this program," Inslee said.

Washington's Life Sciences Discovery Fund finances a broad spectrum of health-related research and programs, among them: studies on the brain, breast cancer, blood and diabetes; developing technologies for human cell therapies; helping rural communities deal with mental health and substance abuse; efforts to help hospitals improve surgery safety; and developing "smart home" technology for the elderly.

Inslee's action on the life sciences fund came as he approved and signed most of supplemental budget for small mid-course tweaks in the 2013-2015 budget for the 2014-2015 fiscal year. One tweak was adding $952,000 to begin studies on how to improve safety around the transport of oil by rail and ship in Washington — a small, compromise version by budget negotiators of two House and Senate bills that died in the Senate amidst complicated political battles.

The Life Sciences Discovery Fund money disappeared during the behind-the-scenes talks on a compromise supplemental budget. The House wanted to keep it intact, and the Senate wanted to remove it — with the Senate negotiators winning on this issue in the overall give-and-take. Eighteen Democratic senators and representatives recently wrote a letter to Inslee asking him to restore the fund. Other biotech and economimc development interests also lobbied the governor to keep the fund.

"To those of you who communicated your concern about the potential elimination of the Fund to your colleagues, the Governor, and your elected officials, we offer a heartfelt thank you. We are truly humbled by the outpouring of support we have received from a variety of stakeholders around the state and nation," wrote John DesRosier, the executive director of the fund.

In 2005, then-Gov. Chris Gregoire and the Legislature established a program to spend $350 million — $35 million a year from 2008 though 2017 — to bolster life sciences research and use that research to create new jobs. The $350 million comes from the 1998 settlement between tobacco companies and numerous states, including Washington.

The actual tobacco settlement payments to the state have been close to the original projections, and the subsequent research allocations from the Life Sciences Discovery Fund were about $33 million each in fiscal 2008 and fiscal 2009. But the Legislature has been dipping into Washington's overall tobacco settlement revenues to pay for other programs; less than $15 million went to life sciences research in 2010. Since then, tobacco settlement appropriations to the fund have been less than $10 million annually, with the bulk of the tobacco settlement money getting funneled into the state's general fund.

So far, roughly $80 million in Life Sciences Discovery Fund money has been spent, with almost $20 million earmarked to honor the fund's existing obligations. The $80 million spent so far has leveraged an additional $450 million in outside investments, which translates into roughly 3,000 new jobs, according to DesRosier, who notes that the program's research has also led to $67 million in health care savings. Since 2007, the Discovery Fund has awarded 79 grants to universities, health science institutions and at least 40 Washington companies. More than 20 of those beneficiaries have been start-ups.

Life sciences is the state's fifth largest business sector, according to the Washington Biotechnology and Biomedical Association. WBBA figures show about 34,000 direct biotech jobs, a number that grows to roughly 92,000 when the ripple effects and support jobs are added. The biotech industry contributes roughly $11 billion to Washington's economy with more than 400 drug research and medical technology firms across the state.